Competitiveness and social cohesion, two key pillars for a sustainable and prosperous European Union, are the focus of JRC's regional economic analysis and modelling. A large part of the EU budget is devoted to promote inclusive development and we aim at supporting policy makers in assessing the impact of their choices. Economic impact assessment of regional policies is a complex task. It affects a wide range of macroeconomic variables, including GDP, employment, productivity, budget deficit and trade balance, which are interrelated and affected by a large number of external factors.
Our main contribution to policy making is to create awareness on secondary effects of policies, on their unintended consequences and on their positive spillovers. We interact and collaborate with colleagues in the policy and research areas translating specific policy proposals into model perturbations and provide an idea of their general equilibrium consequences.
A key responsibility of the team is the development, maintenance and use of the RHOMOLO model. It is a spatial CGE model with a focus on EU regions and sectors developed in cooperation with Directorate-General for Regional and Urban Policy (DG REGIO). This model is primarily used for impact assessment of investment policies and reforms. A Rhomolo web tool has been developed to allow users to have an idea of how the model works by running simple simulations of structural changes (in labour productivity, total factor productivity and transport costs) on a simplified version of the model.